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Home » Packaging industry reprioritizes amid inflation, supply chain disruption

Packaging industry reprioritizes amid inflation, supply chain disruption

90% of companies surveyed say they have changed how their packaging is sourced due to market forces.

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June 22, 2022
Supply Chain Quarterly Staff
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A survey of 300 packaging industry decision makers shows that most are shifting their priorities in response to inflation and supply chain disruptions over the past year, with 90% saying they’ve changed how their packaging is sourced.

Printing and packaging provider R.R. Donnelley & Sons Co. (RRD) released the Unpackaging Reality Report today, which explores how converging disruptive issues including supply chain volatility, inflation, labor shortages, and increasing sustainability pressures have affected the industry.

The study found that material price hikes and supply shortages presented the biggest hurdles for the industry over the past year, with more than half of respondents reporting they have been strongly affected.These challenges, among others, forced organizations to reprioritize packaging materials (68%), budget (52%), packaging design and aesthetics (49%), and sustainability goals (45%). Despite the challenges of the past few years, the study also found that, overall, the packaging industry proved resilient and continued to move toward a more sustainable and innovative future.

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“There’s no disputing that rising costs, supply chain snares, and talent pinches have posed major challenges to the packaging industry, but that doesn’t mean this reality is all doom and gloom,” RRD executive Lisa Pruett said in a press release Wednesday. “These challenges actually transformed the industry into a more innovative, agile, and environmentally conscious sector. Organizations responded with diverse strategies, as there is not a one-size-fits-all approach to tempering disruptions.”

Some of the report’s key findings underscore the industry’s shift toward innovation, its response to e-commerce pressures, and its “surprising strides in sustainability despite cost pressures.”

On the innovation side, 62% of respondents said they have diversified suppliers, 42% have outsourced manufacturing and fulfillment, 39% have consolidated suppliers, 30% have substituted specs, and 26% have reshored their manufacturing to the U.S. What’s more, there is “broad willingness to pivot to different packaging materials in light of supply chain sourcing challenges, with over one-third (36%) saying they were extremely willing to use alternative materials. As for guidance and information, 78% of respondents looked to suppliers, vendors or direct manufacturers,” according to the report.

When it comes to online ordering, the majority of respondents (57%) said they experienced an increase in e-commerce orders in the past one to two years and, for nearly all of them (92%), this resulted in an increase in packaging needs. Packaging professionals responded to the growth in e-commerce orders by increasing inventory (55%), expanding warehousing (53%), changing materials (52%), and increasing staff (51%).

On the environment, the authors said the survey findings contradict the sentiment that sustainability initiatives fell to the back burner as companies grappled with other pressing priorities. Almost all respondents (94%) agreed that sustainability is a key consideration in packaging and label decisions, with two-thirds saying they shifted to more sustainable packaging than what they used previously. When considering sustainability, budget is the top influencing factor—more so than external regulations or consumer preferences—suggesting that cost-effective eco-friendly materials are in high demand.

“Of note, the majority of packaging decision makers (55%) believe recent supply chain disruptions moved their companies closer to their carbon emissions goals, suggesting sustainability initiatives may prove versatile and resilient,” according to the authors.

The full report is available on the RRD website.

Logistics Services Strategy
KEYWORDS RRD
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